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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 4, 1996
(August 29, 1996)
NEW PLAN REALTY TRUST
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(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-7532 13-1995781
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1120 Avenue of the Americas, New York, New York 10036
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 869-3000
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(Former Name or Former Address, if Changed Since Last Report)
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 4, 1996
NEW PLAN REALTY TRUST
By:/s/ Michael I. Brown
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Michael I. Brown
Chief Financial Officer and
Controller
Item 2. Acquisition or disposition of assets
New Plan Realty Trust (the "Trust) purchased nine properties for an
aggregate purchase price of approximately $75.4 million, which was paid in cash
and was the estimated fair market value of such properties. Additional
information regarding the nine properties is set forth below.
Date of Occupancy
Property Acquisition Acres Units Seller at Acquisition
Goldcrest 8/29/96 9 173 Goldcrest 93%
Apartments Apartments Ltd
Cincinnati, OH
Cambridge Park 8/29/96 14 196 Princeton 89%
Apartments Square Village
Cincinnati, OH Partners
Riverchase 8/29/96 5 203 YCT Apartments Ltd 91%
Apartments
Newport, KY
Woodbridge 8/29/96 19 220 Woodbridge Apts Ltd 93%
Apartments
Nashville, TN
Landmark Estates 8/29/96 9 92 Landmark 96%
Apartments Estates II LP
East Ridge, TN
Regency Club 9/16/96 17 232 Labcor IV LP 94%
Apartments
Evansville, IN
Sherwood Acres 10/31/96 26 620 Sherwood Partners LP 98%
Apartments
Baton Rouge, LA
Willow Bend Lake 10/31/96 25 360 Willow Bend Lake 96%
Apartments Partners LP
Baton Rouge, LA
Forestwood 10/31/96 11 272 Forestwood 96%
Apartments Partners LP
Baton Rouge, LA
Audited statements of revenue and certain operating expenses for the year
ended July 31, 1996 and pro forma financial information reflecting the
acquisition of the nine properties are included in this Current Report on Form
8-K.
1 To be completed when closed.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(a) and (b) Financial Statements of Businesses Acquired and Pro
Forma Financial Information.
1. Report of Eichler, Bergsman & Co., LLP, Independent Certified
Public Accountants, dated October 10, 1996.
2. Certain properties acquired - Historical Summary of Combined
Revenues and Certain Operating Expenses for the year ended July
31, 1996.
3. In addition, the following pro forma financial information is
provided to reflect all nine properties acquired:
(i) New Plan Realty Trust and Subsidiaries - Information
pursuant to Rule 3-14 of Regulation S-X.
(ii) New Plan Realty Trust and Subsidiaries - Pro forma
condensed consolidated financial statement (unaudited):
(a) Pro forma condensed consolidated statement of income
for the year ended July 31, 1996.
(b) Pro forma condensed consolidated balance sheet as of
July 31, 1996.
(c) Notes to pro forma condensed consolidated financial
statements.
(c) Exhibits
Included herewith is Exhibit No. 23, the Consent of the Independent
Accountants.
New Plan Realty Trust
1120 Avenue of the Americas
New York, New York 10036
INDEPENDENT AUDITOR'S REPORT
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We have audited the accompanying Historical Summary of Combined Revenues and
Certain Operating Expenses of Goldcrest Apartments, Cambridge Park Apartments,
Riverchase Apartments, Woodbridge Apartments, Landmark Estates Apartments,
Regency Club Apartments, Sherwood Acres Apartments, Willow Bend Lake Apartments
and Forestwood Apartments (the "Properties") for the year ended July 31, 1996.
This Historical Summary is the responsibility of New Plan Realty Trust's
management. Our responsibility is to express an opinion on this Historical
Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The Historical Summary has been prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission, and its use
for any other purpose may be inappropriate. Accordingly, as described in the
Note to the Historical Summary, the statement excludes interest, depreciation
and general and administrative expenses for the period and is not intended to
be a complete presentation of the Properties' revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the revenues and certain operating expenses (exclusive
of interest, depreciation and general and administrative expenses) in
conformity with generally accepted accounting principles.
EICHLER, BERGSMAN & CO., LLP
New York, New York
October 10, 1996
CERTAIN PROPERTIES ACQUIRED
HISTORICAL SUMMARY OF COMBINED REVENUES AND CERTAIN OPERATING EXPENSES
FOR THE YEAR ENDED JULY 31, 1996
(IN THOUSANDS)
Rental income $13,526
Repairs and maintenance $1,223
Real estate taxes 774
Other operating expenses 3,107 5,104
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Excess of revenues over certain
operating expenses $ 8,422
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NOTE:
The Historical Summary of Combined Revenues and Certain Operating Expenses
relates to the operation of Goldcrest Apartments, Cambridge Park Apartments,
Riverchase Apartments, Woodbridge Apartments, Landmark Estates Apartments,
Regency Club Apartments, Sherwood Acres Apartments, Willow Bend Lake Apartments
and Forestwood Apartments (the "Properties") while under ownership previous to
New Plan Realty Trust. The Properties are residential apartment complexes.
The summary has been prepared on the accrual method of accounting. Operating
expenses include maintenance and repair expenses, utilities, real estate taxes,
insurance and certain other expenses. In accordance with the regulations of
the Securities and Exchange Commission, mortgage interest expense,
depreciation, and general and administrative costs have been excluded from
operating expenses, as they are dependent upon a particular owner, purchase
price or financial arrangement.
NEW PLAN REALTY TRUST AND SUBSIDIARIES
INFORMATION PURSUANT TO RULE 3-14 OF REGULATION S-X
Part I MANAGEMENT ASSESSMENT
Management's assessment of the nine properties prior to acquisition
includes, but is not limited to, the quality of the tenant base, regional
demographics, the competitive environment, operating expenses and local
property taxes. In addition, the physical aspect of the nine properties,
location, condition and quality of design and construction are evaluated.
Management also always conducts Phase I environmental tests. All factors, when
viewed in their entirety, have met management's acquisition criteria.
Management is not aware of any material factors relating to the acquisition
other than those discussed above.
Part II ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED FROM
CERTAIN PROPERTIES ACQUIRED (UNAUDITED)
a. The following presents an estimate of taxable operating income and
funds generated from the operation of the acquired nine properties
for the year ended July 31, 1996 based on the Historical Summary of
Combined Revenues and Certain Operating Expenses. These estimated
results do not purport to present expected results of operations for
the nine properties in the future and were prepared on the basis
described in the accompanying notes which should be read in
conjunction herewith.
Estimates of taxable operating income (In Thousands)
Operating income before depreciation expense $8,422
Less:
Estimated depreciation 1,508
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Estimated taxable operating income $6,914
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Estimates of funds generated:
Estimates taxable operating income $6,914
Add: Estimated depreciation 1,508
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Estimate of funds generated $8,422
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b. Estimated taxable income for New Plan Realty Trust (including the
nine properties) for the year ended July 31, 1996 is approximately
the same as Pro Forma net income reported on the Pro Forma Condensed
Statement of Income (Unaudited).
NEW PLAN REALTY TRUST AND SUBSIDIARIES
NOTES TO ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED
FROM CERTAIN PROPERTIES ACQUIRED
(UNAUDITED)
Basis of Presentation
1. Estimated depreciation was based upon an allocation of the purchase
price to land (20%) and building (80%) with the depreciation being
taken over a 40 year life using the straight line method.
2. No income taxes have been provided because New Plan Realty Trust is
taxed as a real estate investment trust under the provisions of the
Internal Revenue Code. Accordingly, the Trust does not pay Federal
income tax whenever income distributed to shareholders is equal to at
least 95% of real estate investment trust taxable income and certain
other conditions are met.
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The pro forma condensed consolidated statement of income for the year
ended July 31, 1996 reflects the acquisition of the nine properties as if the
transactions had occurred on August 1, 1995. This pro forma information is
based on the historical statement of the Trust after giving effect to the
acquisition of the nine properties.
The following unaudited condensed consolidated balance sheet as of July
31, 1996 reflects the acquisition of the nine properties.
The unaudited pro forma condensed consolidated financial statements have
been prepared by New Plan Realty Trust management. The unaudited pro forma
condensed consolidated statement of income may not be indicative of the results
that would have actually occurred had the acquisitions been made on the date
indicated or that may be achieved in the future. The unaudited pro forma
condensed consolidated financial statements should be read in conjunction with
New Plan Realty Trust's audited consolidated financial statements as of July
31, 1996 and for the year then ended and the accompanying notes (which are
contained in the Trust's Form 10-K for the year ended July 31, 1996).
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED JULY 31, 1996
(In thousands except for per share amounts)
HISTORICAL PRO FORMA
AS REPORTED ACQUISITION ADJUSTMENTS PRO FORMA
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RENTAL REVENUES $162,821 $13,526 $176,347
INTEREST AND DIVIDENDS 4,785 ($1,120) (2) 3,665
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167,606 13,526 (1,120) 180,012
OPERATING EXPENSES 57,302 5,104 62,406
DEPRECIATION EXPENSE 20,004 1,508 (2,3) 21,512
INTEREST EXPENSE 17,561 3,490 (2) 21,051
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72,739 8,422 (6,118) 75,043
OTHER DEDUCTIONS 2,616 2,616
OTHER INCOME 398 398
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NET INCOME $ 70,521 $ 8,422 ($6,118) $ 72,825
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NET INCOME PER SHARE $ 1.25 $ 1.29
AVERAGE SHARES
OUTSTANDING 56,484 56,484
SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF JULY 31, 1996
(In Thousands)
PRO FORMA
AS REPORTED ADJUSTMENTS (1) PRO FORMA
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ASSETS:
REAL ESTATE $895,418 $75,415 $970,833
CASH, CASH EQUIVALENTS,
MARKETABLE SECURITIES AND
OTHER INVESTMENTS 29,993 (27,993) 2,000
OTHER 19,983 19,983
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TOTAL ASSETS $945,394 $47,422 $992,816
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LIABILITIES:
MORTGAGES PAYABLE $ 48,936 $ 48,936
NOTES PAYABLE 208,990 $47,422 256,412
OTHER LIABILITIES 28,114 28,114
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286,040 47,422 333,462
SHAREHOLDERS' EQUITY 659,354 659,354
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $945,394 $47,422 $992,816
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SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NEW PLAN REALTY TRUST AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)
1. Pro Forma Adjustments reflect the acquisition of the nine properties using
cash on hand and increased borrowing.
2. Pro Forma Adjustments to the unaudited Pro Forma Condensed Consolidated
Statement of Income for the year ended July 31, 1996 include adjustments
to reflect the acquisition of the nine properties as if they had been
acquired on August 1, 1995. (See Note 3.) These adjustments include a
reduction in interest income due to the use of cash and cash equivalents
to purchase the aforementioned properties and an increase in interest
expense due to an increase in debt to partially finance such acquisitions.
The interest rate used for calculating the reduction in interest income
was 4%, representing the average rate of interest earned on the Trust's
cash balances. The interest rate used for calculating the interest
expense was approximately 7.4%, the weighted average interest rate on
notes payable.
3. Estimated depreciation was based upon an allocation of the purchase price
to land (20%) and building (80%) with the depreciation being taken over a
40 year life using the straight line method.
EXHIBIT INDEX
Exhibit Number Description
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23 Consent of Independent Accountants